Any Homeowners Insurance agents here? Can you explain

something tome. I have received a rise in my house assessment. Also, a jump in Home Owners Insurance. Since there is so little $$$$ to go around, I tried to get the assessors to review my assessment. Nope, made just a little too much with Social Security and Unemployment don't qualify for the Senior $1000.00 abatement. That will be ending soon and I will have just SS to live on. I will be eligible next year if I don't find a job because unemployment will have run out.

The homeowners insurance hike confuses the heck out of me.

Statistics: The town says my house is worth 186,300, my land at 268,600. Because the town is small, their reasoning for the land value is that there is just no more to build on. In total, I doubt if I could come close to selling this house for 454,900. R.E.Taxes are $4353 per year.

My Insurance company says, per the new bill, that my house has to be insured for replacement value and that that figure has nothing to do with assessment or sale price. Since they do not insure the land or the foundation, why the heck do I have insurance on a replacement value calculated at $579,900?. Remember, the town says my house is worth $186,300.

In the first place, that is foolish, in the second place, if something happened, they'd depreciate the heck out of it anyway. I pay for an outbuilding and do not have one. They told me that is standard.
The value of contents of my house is far less than the Personal Property figure given. Again, we know about the depreciation figure there. I was told that is a percentage of the insurance on the dwelling. However, be prepared to prove what you own. The only way I could do that would be to take a photo of everything in the house. Phooey. If they are going to charge me this ridiculous rate, why do I have no recourse but to tell the company they are being unreasonable.

Proving what you lose would be a huge task for any homeowner. Taking your money for premiums seems to be no problem with the insurance company.

Does it pay to shop around with this type of insurance? I'm paying $1210 per year.

Thanks to anyone who could advise.

Edited for clarity RE: abatement.

That sounds very very fishy to me. I don't pay for an outbuilding I don't have.

she needs to go down to the assessor's office (or insurance co. office) and ask WTF?

is $569,000 and the PP is $397,600 and they want $2954 this year... a 21% increase over last year.

Who currently has your homeowner's policy? Do you have a farming operation?

What state are you in. I have never lived anywhere where the property taxes are tied to income. That is interesting and sounds like a good idea.

There is a $100.00 rebate allowed by the town if you are over 65 and have an income below $20,000. I don't qualify this year but will when unemployment runs out.
The closest I come to a farm is about 6 tomato plants in my back yard.

I live in MA.

As for the land value - if it is zoned residential point out to the tax guy that no one is going to be starting a new development in the near future because they can't borrow money.

I always chose to reduce the personal property coverage since the value of my belongings never came close to the insurance company formula. You can also reduce your premium by increasing your deductible.

You insure for what it would cost to build a replacement dwelling should yours be destroyed. That cost may differ substantially from the assessed value of your home so keep that in mind.

Therefore insurance co's are gonna jack rates like the credit card companies. Of course, the insurance companies ARE the credit card companies, thanks to GLB (repeal of Glass-Steagall), and Clinton's signature.

the banking side of the business and insurance side (rates/losses). Has this changed?

That isn't required anymore either. Zero reserve requirements. So, actually no there aren't any firewalls. No rules, no

laws. The only systems that fail you are the ones you trust in.

value assessed by the town and the value assessed by the insurance companies. The town tells me the house is worth one price, my agent gives me no real reason why the whole package is based on their $500,000 insurance valuation, especially since they do not cover land and foundation.

That difference just makes no sense to me. Instead of the real nuts-and-bolts reasoning for the difference, all I was told was that one figure is not connected to the other.

For some areas, this rate may be good, but for me, the very large hike in premium will put me in a real bad place soon. We are all facing the rises of RE taxes, rents, insurances(inc health), heating oil($2.79 gal) electricity, you name it. If I don't eat at all next year, buy no clothes, don't drive anywhere, never eat out or do a few other normal things, I might be able to pay my basic bills out of a SS check of $960.00.

I do so wonder who in Washington said there was no change in cost of living this past year so SS recipients could receive a few more dollars a month.

Baloney.

I am going to shop around. I like the agent I use, they are very nice and in town. I just don't understand any of the cost reasoning.
There are other local agents. After the next storm passes us, I'm off to find out if I can do better or at least get an explanation.

Try to find someone who will cover you for the actual rebuilding cost if your home is a total loss, which is standard. Also find one who won't charge you for nonexistant outbuildings or personal possessions.

You need to dump these chumps ASAP.

If State Farm is in your area, I'll give them a plug. They do the above, have paid a couple of claims and haven't canceled me. You can't do better than that.

but you can have them issue riders to raise it or lower it, as the case may be.

demolition and removal of waste and rebuilding. It seems to me you should be able to get a per-square-foot figure from a local builder and go with that. You would have to allow for a cushion on materials cost as they may fluctuate.

Just looking at my policy, replacement comes in at $175 per square foot. My insurance rate comes out to about $0.30 per square foot per year.

and the assessed value of a home has absolutely nothing to do with its insured value, sale price, or anything else in visible reality. Assessed valuation are just an attempt to get property taxes adjusted and are set by formulae only the assessors understand.

Every insurance company has its own rules for replacement cost and other values, but they tend to follow some basic ideas. They'll look at the square footage, construction costs in your area, whether you have anything abnormally expensive to fix or replace, then stir over low heat for a while and come up with a value. Standard personal property values tend to be a percentage of the house value and can be adjusted within limits.

If the value of your house suddenly crashed for some reason, it would still cost the same for the insurance company to replace the roof, floors, wallpaper, and whatever else got burned or blown up, hence the coinsurance and replacement value clauses.

Now, none of this is necessarily about to be changed for anyone's benefit-- it's all derived primarily from the insurer's, or the industry's, claims experience and formulas are invented to fit the experience to anticipated underwriting results. The outbuilding coverage, for instance, could be thrown in for a buck or two a year in case you put up a shed, and outbuildings rarely cost much to replace so they would be rated much cheaper than the main house.

There are other things you can't know about, such as restructuring of the company's catastrophe reinsurance or inability to maintain the investment income it once had, leading it to rely more on underwriting income.

I switched, after my company raised my deductible, and saved several hundred. I also pulled my auto insurance from the company that insured my house and saved on that coverage, too. I not only saved, I got more coverage and, if you don't have a claim during the year, you get a 5% rebate when you renew. I'm very happy.

Some of these mega companies have forgotten why they exist.

It's in your best interst - and his - to find you a better policy.

Where do you live? He may have to refer you to the local agent(s) in your area, but, yes, it does help to shop around.

It took a bit of bickering back and forth, but finally the agent agreed to lower the value of our house which reduced our rates several hundred dollars, to what they were last year. FWIW, our son did the same thing.

Your best bet would be to check out what the average new house costs per square foot to build in your area. Multiply that by your house square footage. Ours was tacking on extra building costs like plaster walls and oak flooring and trim work etc, all the things our current house has that would raise the cost of rebuilding. We figured we could give those things up to save money on our premiums.

Your rates seem much better than ours are around here in Ohio. We were valued around $250,000 and our premiums before they were adjusted, were about the same as yours.

property taxes because of it.

I just talked to my dad, who's a retired insurance company exec. He said you have the right to see the calculator tool they used to come up with the replacement amount. Make them show you why it's so high. If they won't, ditch 'em.

He also said, based on the numbers you provided in your OP, that you're likely being ripped off.

He worked for USAA and Traveler's for a long time, he knows Property and Casualty inside and out. For instance, his current house is insured at half the market value, because that's all it would cost to replace it. Replacement cost should only rarely be higher than market value, since market value includes the land.

Also, most home damage is by fire, and he says very few house fires result in a total loss, which your insurance company appears to be banking on. Definitely see these people and demand answers, and proof. Then go shopping. Let them know you're going shopping, and they'll likely find a "mistake" and adjust your premium.

sewer backup, busted pipe, etc. So do NOT sign anything that excludes water damage.

I do know he said that total fire loss is exceedingly rare. I may have extrapolated from that.

www.zillow.com See if it's really assessed at what they say. They're pretty accurate.

insuring my home that is not within 5 miles of the coast here in west central floriduh, in fact it's 7 miles each way to the gulf and the bay (tampa that is). My premium is only $2800 per year on a 1926 3 bed/1 bath 1100 sf frame home with a garage.

Jeeez, that 225.00 a month for insurance sucks. When we first bought, the premium was 165.00 a year (1979).

Not much has changed except they don't use anal lube anymore. :hurts: